The National Uniform Billing Committee (NUBC) was established in 1975 by the American Hospital Association with the mandate to simplify healthcare billing in the U.S. and develop one standard, nationally-accepted billing form. After years of technical data and policy debate, the NUBC voted in 1982 to accept the UB-82 and its associated data manual for implementation as a national uniform bill. The UB-82 standard has now evolved into the UB-04 standard which has been approved for use in the United States since 2007. Accordingly, the UB-04 claim form, also known as the CMS-1450 form, is presently the standard, uniform bill (UB) for institutional healthcare providers that are used throughout the United States to bill third party payers such as insurance companies. FIG. 6 provides an example of the field descriptions that are found in a UB-04 form.
The UB-04 claim form requires use of codes maintained by the NUBC. Examples of such codes are condition codes, occurrence codes, occurrence span codes, value codes and revenue code. Examples of revenue codes (field 42 of the UB-04) include for example 0210 coronary care, 0211 myocardial infarction, 0300 laboratory, 0301 chemistry, 0302 immunology, 0110 room/board—PVT, 0111 Room Board Medical/surgical/gyn. A full listing of revenue codes is found in the Official UB-04 Data Specifications Manual 2014, product code PM2014, which is licensed by the American Hospital Association and which is hereby incorporated by reference herein in its entirety.
Accordingly, the UB-04 is the form that the government demands that the care givers, such as hospitals, use to bill. Moreover, the form is very uniform. When using such forms, care givers also itemize out specific charges for each revenue code. Thus, each respective revenue code in the UB-04 filled out by a care provider and invoiced to a third part is actually a summary of line item charges associated with the respective revenue code. For instance, in the case of the revenue code 0211, myocardial infarction, the UB-04 data will list revenue code 0211, myocardial infarction, and the total charge for this revenue code. The UB-04 does not have field codes for the itemized line item charges under the revenue codes and thus such line item charges are provided separately. Unlike the UB-04 structure which is highly uniform, there is no uniform charge master for the itemization line items. That is, care giver itemizations are not governed by a standard. Any care giver can bill line items any way they like and mainly use as an internal inventory for UB-04 creation by internal billing personnel, post discharge of patient. For example, if a hospital bills for a surgical procedure on the UB-04, it would be under a revenue code under operating room. Under this revenue code would be a number of itemization line item charges that are separate when billed on the itemization.
While a number of regulations govern some of what itemization line items may be billed under which revenue codes, the lack of any standard for line item nomenclature, and the transparency of what itemization line items are charged on the UB-04 form, gives rise to problems. For instance, because there is no standard nomenclature for line items associated with revenue codes, medical claim payers have no effective means of verifying that such line items are validly associated with their corresponding revenue codes. A line item is often not validly associated with a revenue code when such line items are deemed to be unbundled or redundant. These are items that should have been included in the area or primary service in which they were used. For example, consider the case of an operation that falls under a specific operation revenue code in which the primary service charge for the revenue code is the operation. Line items for routine items that are billed separately and in addition to the primary service charge, as well as billing for use of standard capital equipment in the operating room that were used to facilitate the operation, should not be billed separately as line items. Rather such items should have been included in the charge for operating room per hour. However, because of the vast number of different ways that each medical item or procedure can be validly named, there is no satisfactory method for payers to analyze the numerous line items associated with each of the revenue codes on UB-04 forms in order to make sure that each such line item is validly associated with the corresponding revenue codes.
Another problem that arises due to the lack of uniformity in line item nomenclature is the determination of whether such line item charges (e.g., the charge for the corresponding line item that the care provider imposes) are excessive beyond a reasonable and customary rate. One metric that can be used for such an evaluation is to determine a reasonable and customary price or rate for each possible line item. In the UB format, this is a difficult task and satisfactory methods for achieving such a task are lacking in the art. There are hundreds of valid revenue codes available for the UB-04, and for each such revenue code, many different possible itemization line items, and combinations thereof. The pricing of each such line item is driven by potentially different market conditions. For instance, certain medical items are made of raw materials whose costs fluctuate over time. This drives the care giver to adjust the charge for an appropriate markup. Thus, it is necessary to constantly update the reasonable and customary charges for each line item over time. Moreover, in addition to the problem of a lack of standard nomenclature for such line items, there is a lack of standards in terms of quantifying line items. For example, one care provider may price a line item in metric quantities whereas another care provider may use U.S. standards. In another example, one care provider may price a line item in twenty minute increments whereas another care provider may price a line item in thirty minute increments.
The difficulty in establishing whether line items should have been charged and the difficulty in establishing fair pricing for such line items because of the lack of any uniformity in line item names or units of measure has led care providers and payers to pay insufficient attention, if any, to the line itemization associated with medical bills, and focus, instead, on revenue code charges on the UB. However, as noted above, revenue code charges are summaries of the numerous line item charges. Without satisfactory means for evaluating the underlying line itemization, payers are at risk for overpaying medical claims, or for denying such claims without convincing explanations for why such claims have been denied.
Given the above back-ground, what is needed in the art are improved, efficient methods for evaluating medical chargers so that providers can be compensated at fair prices in a relatively quick amount of time.